(Business 2.0) – To understand the lucrative real estate empire Anshe Chung has created, it helps to spend some time with her "in world." There, she might teleport you to one of her islands, on the continent she's named Dreamland. You can stroll through the floating city she built 700 feet above a desert, walk through elegant Arabian-style homes on land she leases, strike up a conversation in Japanese amid her Asian gardens, or shop for a grand piano in one of her 600 boutiques.

It's all virtual, of course--part of a flourishing online universe called Second Life. And if it sounds absurd, consider this: While Anshe won't talk about how much money she's making ("I'm careful not to stir animosity," she says), Philip Rosedale, the founder and CEO of Linden Lab, which runs Second Life, estimates that she's bringing in around $150,000 a year--in real, hard cash.

First, a primer. About 70,000 people "play" Second Life, though it's not really fair to call it a game. People don't rise through the ranks by slaughtering sinister beasties, for example. No score is kept. Linden Lab, based in real-world San Francisco, simply sets up computer servers and creates a limited supply of undeveloped land. Then it auctions off parcels, typically to developers like Anshe. Rosedale, who launched his virtual universe more than two years ago, characterizes Anshe as the "Rockefeller of Second Life."

She has many schemes, but here's one basic play: Anshe buys up Second Life land, paying Linden Lab roughly $200 a month for each 16-acre plot, plus a one-time fee of $1,250. Then she develops the land, using Photoshop to add rivers, mountains, and forests. Sometimes she hires subcontractors to improve the acreage by designing or building houses. Then she sells or rents to other Second Lifers, who pay good money to inhabit her creations. As in the real world, prices vary by location. But often someone will pay Anshe $100 up front to buy a one-acre plot, plus $20 a month in land tax. In a case like that, Anshe makes $112 in her first year. She's done more than 10,000 various real estate deals. "I'm like Wal-Mart," she says. "The margins are small, but the volume isn't."

Anshe's real-world name is Ailin Graef, though in Second Life she has Bono-like notoriety and is known simply as Anshe. She grew up in China and now lives outside Frankfurt, Germany, where she teaches Chinese, English, and German. But her main gig is running her Second Life empire with her husband. When she joined Second Life just over a year ago, she did so out of curiosity about virtual worlds--to explore how people behaved there and how the experience was different from, say, playing a videogame. "What I found were real people with real emotions and real friendships," says Anshe, 33. "I also found the economy was very real."

Like any good businessperson, Anshe researched the market. She began chatting with participants to figure out what they were looking for. She found that people were frustrated with land developers who asked huge prices and wanted to negotiate, so Anshe began brokering land at fixed prices. Players also wanted neighborhoods that amounted to more than drab slabs of virtual turf, and they wanted some order. So she began creating the equivalent of gated communities, complete with zoning rules. She doesn't allow malls or clubs in certain regions, for instance, and limits the heights of buildings. "She is the government," Rosedale says.

Second Life is still an emerging nation, and Anshe believes it's rife with moneymaking opportunities. The key is to find a niche. As in the real world, for instance, Anshe discovered that people want to spend time with those who are like-minded. So she created specialized areas--places for people who like Asian architecture, for example, and a community for gays and lesbians. She also owns stores that she leases to other virtual merchants.

A strange way to make a living? Perhaps. But for Anshe, it's no stranger than spending tens of thousands of dollars on a designer piece of clothing. It's just a lifestyle, she says, "and I make customers happy."